Playing the right ace

Last year the Canadian PC market set records for shipments of desktop, laptop and x86 servers, according to the latest figures from IDC Canada.

Shipments rose 14.6 per cent, nearly hitting 5.5 million units. As expected, Dell Canada Inc. led with 23.4 per cent of the market, followed closely by Hewlett-Packard (Canada) Co. with a 20.2 per cent share.

But arguably the biggest news is that Acer Canada shouldered out Lenovo Canada for third place with 8.6 per cent of the market compared to 8.1 per cent.

“That’s probably going to be permanent, not something that happens every once in a while,” said Terry Tomeck, Acer Canada’s general manager.

And while his division is way behind the leaders – Dell shipped 1,281,000 million units compared to Acer’s 473,000 — he insists they’re legitimately in his sights. “Our goal is to be No. 1 in the market, so we’re pleased that we’re well on our way,” he said in an interview Tuesday, “but a lot of hard work is ahead of us.” Lenovo Canada declined an opportunity to be interviewed on the figures. Unlike HP and Dell, Acer has few servers. Instead it concentrates on laptops ranging in price from $599 to $1,599. That kind of aggressive pricing is partly credited with Acer’s jump in sales in the past several years since the parent company decided that it wanted to make a big mark internationally.

Taiwan-based Acer Inc. took in US$11.32 billion in revenue last year, representing 16 per cent growth over 2005. After tax profit totalled US$313 million, up 20 per cent over the previous year. Product lines include handheld devices, LCD monitors and TVs. Boosted by the 2005 acquistion of IBM’s PC division, Lenovo Group recently posted third quarter revenue of US$4 billion. But it also said that PC shipments to the Americas in the quarter dropped four per cent.

Acer’s performance has made resellers happy like Stone Harriman, manager of Toronto’s Laptop Depot, which sells most leading laptop brands. “Acer’s a no-brainer (sale),” he said. “They’re the best bang for the buck.” While his leading vendor is Fujitsu, Acer is “rolling over all the opposition.”

Price isn’t the only reason buyers pick Acer, he said. The fact that the company’s call line is based in Texas and not offshore is persuasive, he said. And technical support from Acer Canada’s Mississauga, Ont. headquarters is good. Part of the reason for Acer’s success here is that it plays mainly in the consumer and small business space, said Eddie Chan, research analyst for IDC

Canada’s personal computing technology program. Lenovo, on the other hand, pitches its products mainly at enterprises, a legacy of its history with IBM. The problem is the consumer PC market grew last year at a 23 per cent rate compared to 8.3 per cent by the commercial market.

Acer “picked the right customer segments,” said Chan. Albert Daoust, an analyst with Partner Research, which tracks laptops, believes Acer and HP were also able to step up production to make their products available in the market. Consistent supply helps sales, he said.

In the fourth quarter of 2006 Acer captured 22 per cent of the Canadian notebook market, he said, a leap from 15 per cent in the first quarter. While all laptop makers showed increased sales, Lenovo’s 10 per cent market share didn’t budge over the year.

For all of Tomecek’s pride, Acer still trails Lenovo when total world-wide sales are calculated in market share — 5.9 per cent share compared to 7.3 per cent – according to IDC.

Asked if will take an acquisition to close the gap, Tomecek replied, “I don’t know who’s out there.” (There have been rumours Acer is looking to buy Gateway Computer).

“I think we can get there on our own,” he continued, saying that Acer is already the No. 2 brand in Europe.

He credits Acer’s resellers with the company’s success in this country – it only sells through the channel – the quality of its products and its low operating expenses. This year will see a steady-as-she-goes strategy, Tomecek said, with product refreshes but no new product lines other than a small form-factor PC with an external power supply.

Nor does he feel threatened by Intel Corp.’s attempts to encourage resellers to get into white book assembly. With Acer pricing “there’s no white book market left in Canada,” he said. Still, at the end of this year he’s not expecting a miraculous 12 point leap to catch HP.

“We may not be No. 1,” he added, “but our goal is not to be No.3.”

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now